Comparison: Le Chateau (CTU) vs. Reitmans (RET.A)

These two stocks, Le Chateau and Reitmans both appear to offer an attractive investment at this time. They are also both in the same industry, so it’s interesting to compare them to each other. They are both affected by the same economic environment, which is to say: a headwind that produced disappointing Q1 results.

Reitmans is far larger, with a market cap of $996 million vs. only $214 million for Le Chateau. The earnings of Reitmans have also been far more stable than for Le Chateau.

Le Chateau

  • P/E: 11.3
  • Debt/Equity: 0.12
  • Dividend yield: 8.05% (91% payout)
  • Price/Book: 1.32


  • P/E: 14.2
  • Debt/Equity: 0.02
  • Dividend yield: 5.30% (75% payout)
  • Price/Book: 1.98
Both companies have just experienced a disappointing quarter, and the share price has dropped. Which one seems like a better investment? I like Le Chateau for the higher current yield (more useful to me), although the earnings yield is almost the same. The price is also lower in comparison to earnings and to book value. This provides a little more safety. On the other hand, the debt is higher, even though the level is still manageable. This implies that the results are more leveraged. If the market and economy recover, I’d expect the share price of Le Chateau to outperform that of Reitmans.